I was taught that there is a difference between tax evasion and tax avoidance. Tax evasion is breaking the law, and is illegal. Tax avoidance is minimizing your taxes through legitimate means. Tax avoidance is legal. But some people are starting to argue: that no, it’s not.

And he continues (and I am editing, heavily):

A couple of months ago, I had the opportunity to explain my point of view to Richard Murphy; he’s a well-known writer and blogger in the U.K., who has made a cottage industry out of assailing big corporations for abusing tax systems and the countries that assist them.

In our discussion, Murphy rejected my distinction between tax evasion and tax avoidance. He said it was a question of morality. I must admit that I’m not used to hearing “morality” and “tax” in such a close proximity. In fact, the first time I think it happened was in January of this year when Cameron, of all people, said that foreign corporations like Starbucks, which have avoided paying large tax bills in the U.K., lack “moral scruples.” Starbucks was basically shamed into paying the U.K. more taxes than it legally had to.

As Chris Bergin notes:

Setting aside for now the place of moral scruples in a tax rate, some are arguing that corporations have a higher duty to the countries where they do business and the citizens they sell to than simply paying the lowest amount of tax possible. That argument challenges other well-established theories, among them that corporations have a duty to maximize the investment of their shareholders. Well, is it the only duty of a multinational corporation to maximize value for its shareholders?

And as he concludes:

I found Murphy to be an interesting and knowledgeable tax professional. I can’t say I agree with him on many points. But that doesn’t really matter. These kinds of questions are creating a great debate in the U.K. and the EU, and they’re coming to America. Like it or not, I believe we will have this discussion. Personally, I look forward to it.

That debate is long overdue in the US. I’d better write another article for Tax Analysts. It’s on its way Chris…..I promise.

Those that run these multinationals are in dire need of rediscovering of what to them is an alien concept – morality.

Their behaviour has been wholly amoral and has consisted of nothing more than using the corporations they run as conduits to channel wealth to themselves and a minority to the detriment of the majority.

Good to see that Chris Bergin welcomes a debate on this. He may disagree with the opposition of many to tax avoidance, but at least he’s willing to discuss it. More power to your elbow Richard. Judging from the latest expose in Private Eye on tax avoidance in the UK (i.e for multinationals and the mega wealthy the UK is one big tax haven), that debate is needed here now even more urgently.

What has morality got to do with anything? We have detailed tax laws created by the politicians who we elect. Your duty as a citizen is to abide by these laws. If politicians don’t like the behaviour that results from their laws then change the law.

It is absolutely absurd for people to grizzle about morals when people are abiding by the laws of the land.

Which might be an argument if it worked both ways but it doesn’t. I have a client who engaged in work that clearly passed all the test for R&D tax credits but they trade as an LLP and only companies can claim.

Do you think it would work if I asked HMRC to allow the claim on moral grounds?

What sort of morality is it if only one side are expected to apply it?

First of all, I suggest you get hold of a copy of the latest edition of Private Eye and read the expose there ‘Tax, Lies and Videotape’. Then you’ll see that a lot of these tax laws are now created by the same people who devise, sell and profit from tax avoidance schemes sold to wealthy companies and individuals, not our elected politicians.

Secondly, if these so-called citizens make such efforts to get around the law, they are clearly not abiding by the law of the land. They wish to obtain the benefits of living and doing business in the UK without paying for them. I refer yopu especially to the section in the article about non doms, where it is made plain that some enormously wealthy people live in the UK and pay, effectively, no tax for the privilege of doing so.

These people are, to put it bluntly, freeloaders/scroungers/parasites. I’d say that’s a moral question, wouldn’t you?

“Then you’ll see that a lot of these tax laws are now created by the same people who devise, sell and profit from tax avoidance schemes sold to wealthy companies and individuals, not our elected politicians”

Then perhaps you should be holding the politicians to account for not doing their jobs?

“Secondly, if these so-called citizens make such efforts to get around the law, they are clearly not abiding by the law of the land.”

You seem confused. If you don’t abide the law of the land then you can be punished. Since these companies/individuals are not being punished I would suggest that they most certainly ARE abiding by the law of the land. If you don’t like the law, then change it to get the desired outcome.

I’ve never posted on this blog before but it seems clear that you will censor or be rude to anyone who doesn’t agree with your view of tax so I’ll leave you to chat with likeminded people who all think the same way. It is your blog after all.

Yes, I’d hold the politicians and all their fellow travellers in right wing politics – journalists, think tanks etc to account. Then we need to ask very serious questions about the conduct of the accountants and lawyers who enable these firms and individuals to get away with tax dodging on this scale.

“If you don’t abide the law of the land then you can be punished. Since these companies/individuals are not being punished I would suggest that they most certainly ARE abiding by the law of the land.”

How naive or wilfully ignorant are you? Have you bothered to read the article in Private Eye? The whole thrust of it is that we now have two tax systems in the UK, one for the majority who are expected to pay tax, the other for those indiviuals and companies who can get away with paying virtually nothing, and are therefore, as I said above, scroungers and parasiters.
One law for the rich, another for everybody else. You think that’s OK do you?

The point is you blame the wrong people. The law is the law. If the law is wrong, then change it to get more favourable outcomes. Now this might have a price in terms of multinationals relocating and you will then need to decide if your changes were worth it.

“I refer yopu especially to the section in the article about non doms, where it is made plain that some enormously wealthy people live in the UK and pay, effectively, no tax for the privilege of doing so.”

Can you guess what I am going to say? CHANGE THE LAW. Don’t just sit there bleating about morality. Politicians have the power to create new tax law. Get them to do their job.